Title

A Random Nth-Price Auction

Keywords

Auctions; C7; C9; Demand revelation; Experimental valuation; Q0

Abstract

Second-price auctions are designed to induce people to reveal their private preferences for a good. Laboratory evidence suggests that while these auctions do a reasonable job on aggregate, they fall short at the individual level, especially for bidders who are off-margin of the market-clearing price. Herein we introduce and explore whether a random nth-price auction can engage all bidders to bid sincerely. Our results first show that the random nth-price auction can induce sincere bidding in theory and practice. We then compare the random nth-price to the second-price auction. We find that the second-price auction works better on-margin, and the random nth-price auction works better off-margin. © 2001 Elsevier Science B.V.

Publication Date

12-1-2001

Publication Title

Journal of Economic Behavior and Organization

Volume

46

Issue

4

Number of Pages

409-421

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1016/S0167-2681(01)00165-2

Socpus ID

0013416824 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/0013416824

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